Boston condo for sale commission confusion

South Boston Condos for Sale and Rent

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Boston condo for sale commission confusion

The graph below I found while surfing the internet and social media. Which I will dive into how real estate commissions are confusing and are negatively impacting Boston condo for sale market.

Here’s a hot topic: Sellers expected to pay the buyer-agent fee.

You wanted negotiable commissions? Well, you got ’em, and now the buyer gets a vote – which has never happened before.

Since August 17, 2024, buyers have had to hire an agent in writing and agree to pay their fee. It is common for the buyer to ask the seller to pay the fee, which has been the arrangement for the last 100+ years.

In the example above (clipped from social media), the listing agent wandered right into it by allowing their sellers to counter the buyer agent commission (BAC) down to 2.25%. But the buyer is contractually obligated to pay their agent the 3% fee.

What happens to the remaining 0.75%?

If the buyer-agent unwittingly tries to get their buyer to pay the remaining 0.75%, and their buyer doesn’t like it, the deal falls apart without notice.

Both agents are at fault because they didn’t see it coming.

Most agents grew up in the frenzy era when buyers had to eat everything – higher price, no repairs, free rent, and oh by the way the seller is taking the chandelier, the drapes, and the $4,000 toilet too. For the last six years, sellers and listing agents have expected that the buyer will tolerate everything thrown at them.

Not any more.

Previously, the buyers weren’t a party to the commission agreement – it was only between the sellers and agents. If the seller had something to say about the buyer-agent commission, it was handled on the side because we thought it was none of the buyers’ business. It’s their business now.

See it coming. Plan ahead.

This is the wild wild west, and the buyer-agent commission is the bounty, or reward, to incentivize the buyer-agents to sell your home. Price it into the deal.

If the seller sends a counter-offer with higher price and lower fee, they make two enemies. Instead, pay the buyer-agent fee in hopes that they will feel appreciated and try harder to make the deal. Besides, they may have to share it with buyer or pay referral fees.

What do you do?

If the sellers really want to make a deal and this is the only offer on the table, then here’s a guide on how to handle the buyer-agent commission: